Unfolding identity of financial institutions in bitcoin blockchain by weekly pattern of network flows

Rubaiyat Islam (), Yoshi Fujiwara, Shinya Kawata and Hiwon Yoon
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Rubaiyat Islam: University of Hyogo
Yoshi Fujiwara: University of Hyogo
Shinya Kawata: University of Hyogo
Hiwon Yoon: CMD Laboratory Inc.

Evolutionary and Institutional Economics Review, 2021, vol. 18, issue 1, No 7, 157 pages

Abstract: Abstract In this study, we analyzed bitcoin blockchain data for the period between 2013 and 2018. We constructed daily networks and analyzed the network properties of the bitcoin users and bitcoin flow attributed as edge flow circulated between users to focus on weekdays and weekends activities. In the real world, businesses take time off, particularly on weekends. This is no different in the crypto-asset world, which, theoretically, is operable 24/7. We also performed a threshold analysis of the flow of bitcoin to identify the big wallets and to compare it with the identity of real-world crypto-exchange companies, in particular, their weekly patterns. Finally, we propose a methodology to identify the financial institution in the bitcoin blockchain on the basis of fulfilling some key criteria. The criteria are having high frequency, appearing persistently on daily big trades and showing a distinct weekly pattern of total average network flow.

Keywords: Bitcoin; Blockchain; Money flow (search for similar items in EconPapers)
JEL-codes: E4 E5 (search for similar items in EconPapers)
Date: 2021
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DOI: 10.1007/s40844-020-00184-z

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